Form 10-Q Crawford & Company
Quarter Ended September 30, 1997 Page 2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Financial Statements:
Year-to-Date Unaudited Consolidated Statements of Income for the Nine-Month
Periods ended September 30, 1997 and September 30, 1996:
(In Thousands of Dollars
Except Share and Per Share Data)
1997 1996
Revenues $527,416 $474,089
Costs and Expenses:
Cost of services provided, less reimbursed expenses
of $28,927 in 1997 and $24,333 in 1996 376,592 340,871
Selling, general and administrative expenses 83,324 80,407
Restructuring charge 13,000 0
Total costs and expenses 472,916 421,278
Income Before Income Taxes and Minority Interest 54,500 52,811
Provision for Income Taxes 21,670 21,297
Income Before Minority Interest 32,830 31,514
Minority Interest in Loss of Joint Venture 1,803 0
Net Income $34,633 $31,514
Net Income Per Share
Primary $0.70 $0.62
Assuming Full Dilution $0.67 $0.60
Average Number of Class A and Class B Common
Shares used in Net Income per Share Calculations
Primary 49,736,692 51,216,146
Assuming Full Dilution 51,707,649 52,521,003
Declared Dividends Per Share - Class A Common Stock $0.33 $0.30
Declared Dividends Per Share - Class B Common Stock $0.33 $0.29
(See accompanying notes to condensed financial statements)
Form 10-Q Crawford & Company
Quarter Ended September 30, 1997 Page 3
Quarterly Unaudited Consolidated Statements of Income for the Three-Month
Periods ended September 30, 1997 and September 30, 1996:
(In Thousands of Dollars
Except Share and Per Share Data)
1997 1996
Revenues $178,896 $154,897
Costs and Expenses:
Cost of services provided, less reimbursed expenses
of $10,139 in 1997 and $8,466 in 1996 126,977 110,875
Selling, general and administrative expenses 26,364 25,833
Total costs and expenses 153,341 136,708
Income Before Income Taxes and Minority Interest 25,555 18,189
Provision for Income Taxes 9,967 7,334
Income Before Minority Interest 15,588 10,855
Minority Interest in Income of Joint Venture (702) 0
Net Income $14,886 $10,855
Net Income Per Share
Primary $0.30 $0.22
Assuming Full Dilution $0.29 $0.21
Average Number of Class A and Class B Common
Shares used in Net Income per Share Calculations
Primary 49,449,406 51,033,923
Assuming Full Dilution 51,420,363 52,338,780
Declared Dividends Per Share - Class A Common Stock $0.11 $0.10
Declared Dividends Per Share - Class B Common Stock $0.11 $0.10
(See accompanying notes to condensed financial statements)
Form 10-Q Crawford & Company
Quarter Ended September 30, 1997 Page 4
Consolidated Balance Sheets as of September 30, 1997 and December 31, 1996:
(In Thousands of Dollars)
(Unaudited)
September 30 December 31
1997 1996
ASSETS
Current Assets:
Cash and cash equivalents $68,871 $55,485
Accounts receivable, less allowance for doubtful
accounts of $16,064 in 1997 and $11,692 in 1996 121,166 112,975
Unbilled revenues, at estimated billable amounts 93,317 68,593
Prepaid income taxes 3,134 2,677
Prepaid expenses and other current assets 14,605 7,166
Total current assets 301,093 246,896
Property and Equipment:
Property and equipment, at cost 152,578 123,901
Less accumulated depreciation and amortization (112,264) (92,264)
Net property and equipment 40,314 31,637
Other Assets:
Intangible assets arising from acquisitions,
less accumulated amortization of $10,063 in
1997 and $8,768 in 1996 51,114 52,266
Prepaid pension obligation 47,612 41,405
Other 4,677 5,881
Total other assets 103,403 99,552
TOTAL ASSETS $444,810 $378,085
(See accompanying notes to condensed financial statements)
Form 10-Q Crawford & Company
Quarter Ended September 30, 1997 Page 5
Consolidated Balance Sheets - (Continued)
(In Thousands of Dollars)
(Unaudited)
September 30 December 31
1997 1996
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities:
Short-term borrowings $20,721 $8,437
Accounts payable 18,899 13,329
Accrued compensation and related costs 29,466 30,811
Other accrued liabilities 58,001 32,645
Deferred revenues 16,057 16,300
Current installments of long-term debt 9,750 9,130
Total current liabilities 152,894 110,652
Noncurrent Liabilities:
Long-term debt, less current installments 984 376
Deferred income taxes 11,189 13,810
Deferred revenues 14,136 12,902
Postretirement medical benefit obligation 8,183 8,037
Self-insured risks 8,663 8,172
Minority interest 27,431 0
Other 4,102 2,600
Total noncurrent liabilities 74,688 45,897
Shareholders' Investment:
Class A Common Stock, $1.00 par value; 50,000,000
shares authorized; 23,733,248 and 24,392,393
shares issued in 1997 and 1996, respectively 23,733 24,392
Class B Common Stock, $1.00 par value; 50,000,000
shares authorized; 25,511,224 and 25,718,919
shares issued in 1997 and 1996, respectively 25,511 25,719
Retained earnings 176,221 173,708
Cumulative translation adjustment (8,237) (2,283)
Total shareholders' investment 217,228 221,536
TOTAL LIABILITIES AND SHAREHOLDERS' INVESTMENT $444,810 $378,085
(See accompanying notes to condensed financial statements)
Form 10-Q Crawford & Company
Quarter Ended September 30, 1997 Page 6
Unaudited Consolidated Statements of Cash Flows for the Nine-Month Periods
Ended September 30, 1997 and September 30, 1996:
(In Thousands of Dollars)
1997 1996
Cash Flows From Operating Activities:
Net income $34,633 $31,514
Reconciliation of net income to net cash
provided by operating activities:
Minority interest in loss of joint venture (1,803) 0
Depreciation and amortization 11,742 11,933
Deferred income taxes (3,078) 1,336
Loss on sales of property and equipment 339 324
Changes in operating assets and liabilities:
Short-term investments 0 5,470
Accounts receivable, net 7,691 1,836
Unbilled revenues 4,841 (6,959)
Prepaid or accrued income taxes 4,640 (1,511)
Accounts payable and accrued liabilities 6,462 13,992
Deferred revenues 992 2,624
Prepaid expenses and other assets (15,692) (10,944)
Net cash provided by operating activities 50,767 49,615
Cash Flows From Investing Activities:
Acquisitions of property and equipment (7,506) (6,137)
Sales of property and equipment 205 301
Net cash used in investing activities (7,301) (5,836)
Cash Flows From Financing Activities:
Dividends paid (16,425) (15,119)
Repurchase of common stock (20,624) (15,940)
Issuance of common stock 3,977 1,063
Increase/(decrease) in short-term borrowings 3,755 (1,357)
(Decrease)/increase in long-term debt (3,897) 126
Net cash used in financing activities (33,214) (31,227)
Effect of exchange rate changes on cash and
cash equivalents 3,134 (42)
Increase in cash and cash equivalents 13,386 12,510
Cash and cash equivalents at beginning of period 55,485 40,802
Cash and cash equivalents at end of period $68,871 $53,312
Cash payments for income taxes $21,027 $21,461
(See accompanying notes to condensed financial statements)
Form 10-Q Crawford & Company
Quarter Ended September 30, 1997 Page 7
NOTES TO CONDENSED FINANCIAL STATEMENTS
1. The condensed financial statements included herein have been prepared by
the Registrant, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. These condensed financial statements
should be read in conjunction with the financial statements and related notes
contained in the Registrant's annual report on Form 10-K for the fiscal year
ended December 31, 1996.
In the opinion of management, the condensed financial statements included
herein contain all adjustments (consisting of normal recurring accruals)
necessary to present fairly the financial position of the Registrant as of
September 30, 1997, the results of its operations for the three- and nine-month
periods ended September 30, 1997 and 1996, and its cash flows for the
nine-month periods then ended.
2. The results of operations for the nine-month period ended September 30,
1997, are not necessarily indicative of the results to be expected during the
balance of the year ending December 31, 1997.
3. The Company completed the agreement signed December 19, 1996, with Swiss
Reinsurance Company (Swiss Re) to merge both companies' claims services firms
outside the United States into Crawford-THG Limited, in which the Company has
a 60% controlling interest. The merger was accounted for as a partial sale of
the Company's 100% owned subsidiary, Crawford & Company International (CCI),
to Swiss Re and a partial acquisition of Swiss Re's 100% owned subsidiary,
Thomas Howell Group (THG), by the Company. Swiss Re's 40% interest in the
equity and net income/loss of the joint venture is reflected in the
accompanying financial statements as minority interest.
4. Net income per share is computed by dividing net income by the weighted
average number of shares outstanding during the respective periods. Net
income per share assuming full dilution is determined by dividing net income by
the weighted average number of shares outstanding and common stock equivalents
during the respective periods.
The Company plans to adopt Statement of Financial Standards ("SFAS") No.
128, "Earnings per Share," effective December 15, 1997. This statement will
require dual presentation of basic and diluted EPS on the face of the income
statement for all entities with complex capital structures and will require
restatement of all prior-period EPS data presented. If this statement had
been effective January 1, 1997, the basic EPS would be $0.70 per share and the
diluted EPS would be $0.67 per share for the nine-month period ended September
30, 1997, compared to basic EPS of $0.62 per share and diluted EPS of $0.60
Form 10-Q Crawford & Company
Quarter Ended September 30, 1997 Page 8
per share for the first nine months of 1996.
5. In July 1997, the Financial Accounting Standards Board issued two new
statements. SFAS No. 130, "Reporting Comprehensive Income," establishes
standards for reporting and display of "comprehensive income," which is the
total of net income and all other non-owner changes in stockholders' equity,
and its components. The Company is in the process of evaluating SFAS No. 130
and its impact and will adopt the standard in the first quarter of its 1998
fiscal year.
SFAS No. 131, "Disclosures About Segments of an Enterprise and Related
Information," supersedes SFAS Nos. 14, 18, 24 and 30 and establishes new
standards for segment reporting, using the "management approach," in which
reportable segments are based on the same criteria on which management
disaggregates a business for making operating decisions and assessing
performance. The Company is in the process of evaluating SFAS No. 131 and its
impact and will adopt the standard for its 1998 fiscal year.
6. The Company considers all highly liquid investments purchased with a
maturity of three months or less to be cash equivalents for purposes of the
Statements of Cash Flows.
7. On February 4, 1997, the Board of Directors declared a three-for-two stock
split on both the Class A Common Stock and Class B Common Stock. The split was
effected in the form of a 50% stock dividend on the outstanding shares of each
class, paid on March 25, 1997 to stockholders of record on March 11, 1997. All
share and per share amounts in the accompanying financial statements have been
restated to give retroactive effect to the stock split.
Form 10-Q Crawford & Company
Quarter Ended September 30, 1997 Page 9
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Financial Condition
At September 30, 1997, current assets exceeded current liabilities by
approximately $148.2 million, an increase of $12.0 million from the working
capital balance at December 31, 1996. Cash and cash equivalents at September
30, 1997 totaled $68.9 million, increasing $13.4 million from the balance at
the end of 1996. The Company held no short-term investments at September 30,
1997 or December 31, 1996. Cash was generated primarily from operating
activities, while the principal uses of cash were for repurchases of common
stock, dividends paid to shareholders, and acquisitions of property and
equipment. At September 30, 1997, the ratio of current assets to current
liabilities was 2.0 to 1 compared with 2.2 to 1 at the end of 1996.
During 1996, the Company announced a share repurchase program to acquire up
to an aggregate of 3,000,000 shares of its Class A or Class B Common Stock
through open market purchases. Through September 30, 1997, the Company has
reacquired 2,208,700 shares of its Class A Common Stock and 541,850 shares of
its Class B Common Stock at an average cost of $14.39 and $14.68 per share,
respectively.
The Company maintains credit lines with banks in order to meet seasonal
working capital requirements of its foreign subsidiaries or other financing
needs that may arise. Short-term borrowings outstanding as of September 30,
1997, totaled $20.7 million, as compared to $8.4 million at the end of 1996,
due to the acquisition of THG. Since the acquisition, short term borrowings
have increased $3.8 million, as the Company's foreign operations have expended
cash for the costs accrued in the first quarter restructuring charge. The
Company believes that its current financial resources, together with funds
generated from operations and existing and potential long-term borrowing
capabilities, will be sufficient to maintain its current operations.
The Company does not engage in any hedging activities to compensate for the
effect of exchange rate fluctuations on the operating results of its foreign
subsidiaries. Foreign currency denominated debt is maintained primarily to
hedge the currency exposure of its net investment in foreign operations.
Shareholders' investment at September 30, 1997 was $217.2 million, compared
with $221.5 million at the end of 1996. Long-term debt totaled $1.0 million
at September 30, 1997, or approximately 0.5% of shareholders' investment.
Form 10-Q Crawford & Company
Quarter Ended September 30, 1997 Page 10
Results of Operations
Operating results for the Company's domestic and international operations for
the nine- and three-month periods ended September 30, 1997 and 1996 are as
follows:
Nine-month Periods Ended September 30, 1997 and 1996
Domestic International Total
1997 1996 1997 1996 1997 1996
(In thousands of dollars, except percentages)
Revenues $418,781 $415,720 $108,635 $ 58,369 $527,416 $474,089
Compensation
& Benefits 260,972 268,524 68,453 36,102 329,425 304,626
% of Revenues 62.3% 64.6% 63.0% 61.9% 62.5% 64.3%
Expenses Other
than Compensation
& Benefits 94,109 96,912 36,382 19,740 130,491 116,652
% of Revenues 22.5% 23.3% 33.5% 33.8% 24.7% 24.6%
Pretax Income Before
Restructuring
Charge and
Minority Interest $ 63,700 $ 50,284 $ 3,800 $ 2,527 $ 67,500 $ 52,811
% of Revenues 15.2% 12.1% 3.5% 4.3% 12.8% 11.1%
Three-Month Periods Ended September 30, 1997 and 1996
Domestic International Total
1997 1996 1997 1996 1997 1996
(In thousands of dollars, except percentages)
Revenues $137,842 $137,052 $ 41,054 $ 17,845 $178,896 $154,897
Compensation
& Benefits 84,568 89,338 25,397 11,797 109,965 101,135
% of Revenues 61.4% 65.2% 61.9% 66.1% 61.5% 65.3%
Expenses Other
than Compensation
& Benefits 29,171 29,255 14,205 6,318 43,376 35,573
% of Revenues 21.2% 21.3% 34.6% 35.4% 24.2% 23.0%
Pretax Income Before
Restructuring
Charge and
Minority Interest $ 24,103 $ 18,459 $ 1,452 $ (270) $ 25,555 $ 18,189
% of Revenues 17.5% 13.5% 3.5% (1.5%) 14.3% 11.7%
Form 10-Q Crawford & Company
Quarter Ended September 30, 1997 Page 11
Revenues for the first nine months and third quarter of 1997 were $527.4
million and $178.9 million, respectively, up 11.2% and 15.5% from the $474.1
million and $154.9 million for the same periods in 1996. Consolidated pretax
income before restructuring charge and minority interest increased 27.8% and
40.5%, to $67.5 million and $25.6 million in the first nine months and third
quarter of 1997 compared to the same periods in 1996. While revenues increased
11.2% and 15.5% in the nine- and three-month periods ended September 30, 1997,
corresponding expenses increased only 9.2% and 12.2% due to efficiencies
achieved in operating and support activities throughout the Company.
DOMESTIC OPERATIONS
Revenues
Domestic revenues from insurance companies and self-insured entities totaled
$418.8 million for the nine months ended September 30, 1997, a 0.7% increase
over the comparable period in 1996. Third quarter 1997 revenues totaled $137.8
million, an increase of 0.6% over related 1996 revenues of $137.1 million.
Domestic unit volume, measured principally by chargeable hours and excluding
acquisitions, decreased approximately 2.8% and 4.1% in the first nine months
and third quarter of 1997, respectively, compared to the same periods in 1996.
This decrease was partially offset by changes in the mix of services provided
and in the rates charged for those services, the combined effects of which
increased revenues by approximately 2.1% and 3.5% in the first nine months and
third quarter of 1997, respectively, compared to the comparable periods in
1996. The Company's acquisition of the Thomas Howell Group - Americas unit
based in the United States increased domestic revenues by 1.4% and 1.1% in the
first nine months and third quarter of 1997, respectively, compared to 1996.
Revenues from domestic operations include $19.6 million in revenue from
services provided by the Company's catastrophe adjusters during the first
nine months of 1997, principally to clients affected by natural or man-made
disasters, including hurricanes, floods, hail storms and oil spills. During
the same period in 1996, such revenue approximated $28.7 million. This
decrease was due to a decrease in weather-related claims in the first nine
months of 1997 compared to the same period of 1996. In the third quarter of
1997, revenues produced by the Company's catastrophe adjusters totaled $6.4
million, as compared to $11.3 million in the 1996 third quarter.
Compensation and Fringe Benefits
The Company's most significant expense is the compensation of its employees,
including related payroll taxes and fringe benefits. Domestic compensation
expense decreased as a percent of
Form 10-Q Crawford & Company
Quarter Ended September 30, 1997 Page 12
revenues from 64.6% in the nine months ended September 30, 1996 to 62.3% in
the same period in 1997, and from 65.2% for the third quarter of 1996 to 61.4%
for the third quarter of 1997. This decrease is due primarily to a decline in
administrative compensation expense, resulting from a consolidation of
administrative support functions.
Domestic salaries and wages of personnel other than contract managers decreased
by 3.7% and 4.8%, from $197.5 million and $66.2 million in the first nine
months and third quarter of 1996, respectively, to $190.1 million and $63.0
million in the comparable periods in 1997, due to the aforementioned
consolidation of administrative support functions. Contract managers'
compensation is based on the operating income of the offices which they
manage. Compensation of these managers totaled $31.1 million and $10.1 million
in the nine-and three-month periods ended September 30, 1997, increasing 10.3%
and 8.6% from related 1996 costs of $28.2 million and $9.3 million.
Payroll taxes and fringe benefits for domestic operations totaled $39.8
million and $11.5 million in the first nine months and third quarter of 1997,
decreasing 7.0% and 16.7% from 1996 costs of $42.8 million and $13.8 million,
due primarily to lower employee group medical costs.
Expenses Other than Compensation and Fringe Benefits
Domestic expenses other than compensation and related payroll taxes and
fringe benefits approximated 22.5% and 21.2% of revenues for the nine and
three months ended September 30, 1997, respectively, down from 23.3% and 21.3%
of revenues for the same periods in 1996. This decline is largely due to lower
rent and occupancy costs, as branch locations have been consolidated into
campus environments and excess space has been released.
INTERNATIONAL OPERATIONS
Revenues
Revenues from the Company's international operations totaled $108.6 million
and $41.1 million for the first nine months and third quarter of 1997,
respectively, a 86.1% and 130.1% increase from $58.4 million and $17.8
million for the same periods in 1996. This increase is primarily due to the
acquisition of THG, with seven months' results included in the first nine
months of 1997, due to an acquisition effective date of January 1, 1997
and a two-month delay in reporting international results.
Form 10-Q Crawford & Company
Quarter Ended September 30, 1997 Page 13
Compensation and Fringe Benefits
As a percent of revenues, compensation expense, including related payroll
taxes and fringe benefits, increased from 61.9% to 63.0% in the nine-month
periods ended September 30, 1996 and 1997, respectively. Compensation
expense decreased to 61.9% of revenues in third quarter 1997, from 66.1% of
revenues in third quarter 1996. Salaries and wages of international personnel
decreased from 53.9% and 57.4% of revenues in 1996 to 53.2% and 51.8% for the
comparable periods in 1997, due primarily to efficiencies achieved in
integrating the former Crawford and former THG administrative functions and
branch operations. Payroll taxes and fringe benefits increased as a percent of
revenues, from 8.0% and 8.7% in the nine-and three-month periods ended
September 30, 1996, to 9.9% and 10.0% in the same periods in 1997, due
primarily to more generous retirement programs maintained by the acquired THG
entities.
Expenses Other than Compensation and Fringe Benefits
Expenses other than compensation and related payroll taxes and fringe
benefits approximated 33.5% of international revenues for the first nine
months of 1997, compared to 33.8% of revenues for the same period in 1996.
Third quarter expenses were 34.6% and 35.4% of international revenues for 1997
and 1996, respectively, with the decline due primarily to lower rent and
occupancy costs through the integration of former Crawford and former THG
operations. These expenses comprise a higher percentage of revenues than the
Company's domestic operations due primarily to amortization of intangible
assets and higher automobile, occupancy and interest costs.
Restructuring Charge
In connection with the acquisition of Thomas Howell Group, the Company
recorded a pretax charge of $13 million for personnel, facilities and other
costs associated with integration of the Company's international businesses.
This one-time charge will be recovered through lower operating costs within a
year after the restructuring is completed. After reflecting income tax
benefits of $4.3 million and minority interest share of $3.5 million, this
charge reduced Crawford's net income for the nine months ended September 30,
1997 by $5.2 million, or $0.10 per share.
Minority Interest
Minority interest benefit of $1.8 million and minority interest expense of
$.7 million was recorded in the first nine months and third quarter of 1997,
respectively, reflecting Swiss Re's 40% minority interest in Crawford-THG
Limited.
Form 10-Q Crawford & Company
Quarter Ended September 30, 1997 Page 14
FACTORS THAT MAY AFFECT FUTURE RESULTS
The Company expects to incur significant costs during the next two to three
years to address the impact of the so-called Year 2000 problem on its
information systems. The Year 2000 problem, which is common to most
organizations, concerns the inability of information systems, primarily
computer software programs, to properly recognize and process date sensitive
information as the year 2000 approaches. The Company is in the process of
assessing its systems and developing a specific work plan to address this
issue. The Company believes it will be able to modify or replace its affected
systems in time to minimize any detrimental effects on operations. While it is
not yet possible to give an accurate estimate of the cost of this work, the
Company expects that such costs may be material to the Company's results of
operations in one or more fiscal quarters or years but will not have a
material adverse impact on the long-term results of operations, liquidity or
consolidated financial position of the Company.
Certain information discussed in the Management's Discussion and Analysis of
Financial Condition and Results of Operations may include forward-looking
statements, the accuracy of which is subject to a number of risks and
assumptions. The Company's Form 10-K for the fiscal year ended December 31,
1996, discusses such risks and assumptions and other key factors that could
cause actual results to differ materially from those expressed in such
forward-looking statements. An additional risk factor is the Company's
ability to timely and efficiently address the Year 2000 problem.
Form 10-Q Crawford & Company
Quarter Ended September 30, 1997 Page 15
Review by Independent Public Accountants.
Arthur Andersen LLP, independent public accountants, has performed a review
of the interim financial information contained herein in accordance with
established professional standards and procedures for such a review and has
issued its report with respect thereto (see page 16).
Form 10-Q Crawford & Company
Quarter Ended September 30, 1997 Page 16
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Stockholders and
Board of Directors of
Crawford & Company:
We have made a review of the accompanying condensed consolidated balance sheet
of CRAWFORD & COMPANY (a Georgia corporation) AND SUBSIDIARIES as of September
30, 1997 and the related condensed consolidated statements of income for the
three-month and nine-month periods ended September 30, 1997 and 1996 and the
condensed consolidated statements of cash flows for the nine-month periods
ended September 30, 1997 and 1996. These financial statements are the
responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of obtaining an understanding of
the system for the preparation of interim financial information, applying
analytical procedures to financial data and making inquiries of persons
responsible for financial and accounting matters. It is substantially less in
scope than an audit in accordance with generally accepted auditing standards,
the objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the financial statements referred to above for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Crawford & Company and
subsidiaries as of December 31, 1996 (not presented separately herein), and in
our report dated January 28, 1997, we expressed an unqualified opinion on that
balance sheet. In our opinion, the information set forth in the accompanying
condensed consolidated balance sheet as of December 31, 1996 is fairly stated,
in all material respects, in relation to the consolidated balance sheet from
which it has been derived.
/s/ Arthur Andersen LLP
Atlanta, Georgia
October 31, 1997
Form 10-Q Crawford & Company
Quarter Ended September 30, 1997 Page 17
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
15.1 Letter from Arthur Andersen LLP
27.1 Financial Data Schedule
(b) Reports on Form 8-K
Registrant filed no reports on Form 8-K during the period
covered by this report.
Form 10-Q Crawford & Company
Quarter Ended September 30, 1997 Page 18
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Crawford & Company
(Registrant)
Date: 11/10/97 /s/D. A. Smith
D. A. Smith
Chairman of the Board and
Chief Executive Officer
Date: 11/10/97 /s/D. R. Chapman
D. R. Chapman
Executive Vice President - Finance
(Principal Financial Officer)
Form 10-Q Crawford & Company
Quarter Ended September 30, 1997 Page 19
INDEX TO EXHIBITS
Exhibit No. Description Sequential Page No.
15.1 Letter from Arthur Andersen LLP 20
27.1 Financial Data Schedule (for SEC use only)
Form 10-Q Crawford & Company
Quarter Ended September 30, 1997 Page 20
Exhibit 15.1
To the Stockholders and
Board of Directors of
Crawford & Company:
We are aware that Crawford & Company has incorporated by reference in its
previously filed Registration Statement File No. 2-78989, Registration
Statement File No. 33-22595, Registration Statement File No. 33-47536,
Registration Statement File No. 33-36116, Registration Statement File No.
333-2051, Registration Statement File No. 333-24425, and Registration
Statement File No. 333-24427, its Form 10-Q for the quarter ended September
30, 1997, which includes our report dated October 31, 1997 covering the
unaudited interim financial information contained therein. Pursuant to
Regulation C of the Securities Act of 1933 (the "Act"), that report is not
considered a part of the Registration Statement prepared or certified by our
firm or a report prepared or certified by our firm within the meaning of
Sections 7 and 11 of the Act.
/s/Arthur Andersen LLP
Atlanta, Georgia
October 31, 1997
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<SALES> 0
<TOTAL-REVENUES> 527,416
<CGS> 0
<TOTAL-COSTS> 376,592
<OTHER-EXPENSES> 96,324
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 54,500
<INCOME-TAX> 21,670
<INCOME-CONTINUING> 34,633
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 34,633
<EPS-PRIMARY> .70
<EPS-DILUTED> .67
</TABLE>
